Income protection Insurance for Redundancy

Redundancy is very common during recession period and some unlucky people do lose their job. In case of redundancy the people lose their regular income and for most of the people the savings can only carry them for a few months without salary. Redundancy cover becomes essential when you are married and have children. Well, it is not advisable to wait for the worst to happen and then look for solution. It is a wise decision to have some kind of income protection that provides replacement of your salary even when you are redundant. It may not be possible for you to get an insurance cover when the employer has started the redundancy consultations.

The redundancy cover is provided by many income protection plans and is of great help for all those who have the fear of losing their jobs. However, there are many pitfalls of taking a redundancy cover which the buyer must be aware of. The policies may be filled with exclusions especially for those who are self-employed or having two jobs. Some of the insurance companies do not provide coverage if the insured loses his or her job within 60 days of getting the cover. This is the reason why everyone should plan for such cover beforehand. It is very important that you choose a company and the plan which gives the service as mentioned on the tin. There are some covers which themselves disappear in case of severe downturn. When buying the policy one must read the document very carefully, even that clause that are written in very small prints as they have the power to cancel the policy or can raise the rates with a notice of just 28 days.

The payment on redundancy will depend mostly on the contract of your employment. Based on the contract of the employment a formula is set to compensate you in case you lose your job. Some of the large firms and companies are very generous in their terms and may also enhance the offers made in case they are planning for redundancy of their employees. But some of them chip away with their contractual terms. The payment is based on the wage the person was earning in the first 12 weeks before they became redundant but it excludes all the bonuses or overtime that you may have earned. Income protection for redundancy is definitely a sigh of relief in case you become redundant.